The Cannabist Co Hldg

Good day, and thank you for standing by. Welcome to the Cannabis Company Q2 2024 earnings call. At this time, our participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lee Evans, Senior Vice President, Capital Markets. Please go ahead.

Thank you. Good morning, and thank you for joining the Cannabis Company's second quarter 2024 earnings conference call. With me today are our Chief Executive Officer, David Hart, President Jesse Shannon, and our Chief Financial Officer, Derek Watson. Earlier this morning, we issued a press release reporting our second quarter 2024 results. A copy of this release is available on the Investors section of our corporate website, where you will also be able to access a replay of this call for up to 30 days. Certain remarks we make today regarding future expectations, plans, and prospects for the company constitute forward-looking statements within the meaning of applicable Canadian and U.S. securities laws. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which we disclose in more detail in the Risk Factors section of our Annual Form 10-K for the year ended December 31, 2023, which has been filed with the applicable regulatory authorities. Any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may update any such forward-looking statements in the future, we specifically disclaim any obligation to do so except as otherwise required by applicable law. Also, please note that on today's call, we will refer to certain non-GAAP financial measures such as EBITDA and adjusted EBITDA. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The cannabis company considers certain non-GAAP measures to be meaningful indicators of the performance of its business in addition to, but not as a substitute for, our GAAP results. A reconciliation of such non-GAAP financial measures to their nearest comparable GAAP measure is included in our press release issued earlier today. With that, I will turn the call over to David Hart to get us started. David?

Thank you, Lee, and thank you to everyone who has joined us on the call today. On the two previous earning calls since Jesse and I were appointed to lead a cannabis company in mid-January, you have heard us clearly outline our objectives and the actions that we are taking to build a better business, to create a sustainable economic model, and to drive value for all of our stakeholders over time. We've made very clear that this company will look purely different by the end of 2024, and we have been running fast at the opportunities to make that happen. More specifically, in 2024, we are fixated on driving increased profitability, rationalizing our geographic footprint and corporate expense profile, and proactively implementing all of the changes required to strengthen our balance sheet, adequately meet our debt obligations, and set the company up for sustained growth and profitability in 2025 and beyond. To achieve these objectives, we've had to rapidly identify where opportunities lied and move aggressively to capture them. To that end, in the first half of 2024, we have taken a number of critical steps. Paid $13.2 million to satisfy our May 2024 debt maturity, following on a convertible debt financing completed in March. We implemented an additional corporate restructuring in Q2, both labor and non-labor, that would generate $10 million in cost savings on an annual basis. We structured our regional operational leadership to align retail and wholesale commercialization opportunities. We initiated divestitures of non-core and underperforming assets, most notably Florida, which is expected to reduce loss-making operations and increase efficiency. We restructured our wholesale operation and go-to-market strategy with a shift towards finished goods and a higher mix of brand new partner products, which has helped to reduce underutilized capacity in our cultivation and manufacturing portfolios. By any measure, the work that has been accomplished in the first six months of 2024 by the entire cannabis company team has been transformative. As we announced in June, we are exiting the state of Florida, where we have 14 dispensaries and three cultivation and manufacturing facilities. As we disclosed when we announced the exit, Florida represented less than 5% of total revenue in Q1, which remained true in the second quarter. Given the imbalance of our operations in Florida, the market was also loss making. With a loss of approximately $10 million in adjusted EBITDA expected in 2024, Florida was a priority on our list for rationalization. To date, we have made great progress on the Florida divestitures and look forward to signing definitive agreements and sharing additional details in the near future. As part of the rationalization initiative underway, we have also closed two medical dispensaries in New York, but continue to operate the Riverhead New York Cultivation and Manufacturing Facility, retaining the optionality of an improved wholesale market in New York, which is starting to show some signs of life. Jesse will add more detail in a moment. As we announced just last week, we are selling our operations in Arizona, as well as one of our two licenses and affiliated operations in Virginia to multi-state operator Verano. This is a win-win transaction. For the cannabis company, we are receiving total consideration of approximately 105 million, which strengthens our balance sheet and has already provided a boost to liquidity, a positive step towards de-risking the balance sheet so that we can focus on operations. We expect both the Arizona and Virginia transactions to close in the coming weeks. While we have successfully implemented major structural changes in a very short period of time, we are not anywhere near done. We continue to evaluate underperforming assets. For example, we're in the process of exiting Washington, D.C., and are completing our analysis of other locations in the portfolio. While we are rationalizing our geographic footprint and aligning corporate costs with a smaller operational portfolio, we are simultaneously positioning ourselves to win in our best markets. Ohio has just converted to adult use, and we are perfectly positioned with a Tier 1 license, full canopy, and five stores, primed and ready with the right inventory and additional locations under development. We have identified a location for our sixth dispensary, which is an exciting next step after the launch of adult use on August 6th. Notably, we saw a strong sequential increase in revenue in Ohio in Q2, an indicator of the excellent momentum we have in the market thanks to our growing wholesale program. We've increased capacity in New Jersey and expect to have another dispensary open around the end of the year, which will bring us to the state maximum of three. We're also very excited about the pending transition to adult use in both Delaware and Virginia, two of the markets where we remain very well positioned. In summary, our team is proactively attacking what has challenged our company in the past. We are simplifying our business, rationalizing our footprint, investing in the best markets and systems, implementing material changes in our wholesale and retail operations, improving margins, strengthening our balance sheet, and to put it simply, building a better business. We look forward to keeping you apprised of our continued progress. With that, I will now turn the call over to Derek to discuss our financial results. Derek?